A security company once known for its brash ads and confident claims, is now paying $12-million to settle charges that its identity theft and data security claims were false.
"There are a whole series of situations that you cannot buy a service to protect you from that crime…that’s what we are trying to let people know,” she said.
Money from the settlement will be used to offer refunds to the more than one million people who signed up for LifeLock’s $10-a-month identity protection program. Up-to-date information about what the FTC is calling its "redress program" can be found on its website and www.ftc.gov/lifelock. Customers do not have to contact the FTC to be eligible for refunds.
According to the FTC complaint, LifeLock claimed that it could protect users from identity theft. However, the minimal protections the company offered could not users from the misuse of their existing bank accounts and credit card accounts, which are the most common types of identity theft.
"The protection that LifeLock provided left such a huge hole in it, you could drive that truck right through it," said Leibowitz, recalling the company’s famous commercial that showed a billboard truck driving through the streets of Chicago with LifeLock CEO Todd Davis’ social security number on it.
LifeLock on Tuesday issued its own statement which ignored the monetary settlement.
"LifeLock is pleased with this agreement, which, for the very first time, works to set advertising guidelines for the entire industry. We welcome federal and state efforts to regulate our industry, because doing so helps to protect consumers from the risks of identity theft," said LifeLock Chairman and CEO Todd Davis.
Lifelock will continue its business under what the FTC is calling a new business model.
"From our perspective, as long as the company is honest and upfront with consumers, as long as it lets subscribers know what they are getting, as long as it has adequate security safeguards for customer information," Leibowitz says. "We wish LifeLock well."